BOTH commenters (Seeley, 2016; Seiter, 2016) identify that the limit pricing model has limited applicability, a position with which we concur. We believe that the pricing of pharmaceuticals requires multistranded approaches that vary by specific situation. The limit pricing proposal is intended to identify (and encourage) win-win scenarios wherein rapid adoption is exchanged for lower prices.

There are undoubtedly data challenges such as those of evaluating long-term outcomes, but these are important for any objective evaluation of returns to drug spend to overcome. These data issues are compounded if indirect and intangible savings, such as the quality and duration of life or worker productivity, are included. Moreover the introduction of these dimensions once again brings into question how they can be rationally evaluated as analysis of "gains" tends to ignore the displaced spending that occurs when we apply the constraint that funding sources (eg, taxes) are limited.

As importantly, Seiter raises the question as to whether payers are willing to incorporate longer term outcomes into payments or will instead heavily discount future gains. This is an important question. Budgetary pressure may be the short-term problem of an incumbent politician and gains may accrue to a different private insurer to the one the patient is enrolled with today. The answer to this question will indeed alter the limit price boundary as many expensive future costs may be excluded.

The example given by Seeley of the substitution of similar high-cost drugs, a point also raised by Seiter as the utility of limit pricing in addressing pharmaceuticals with marginal clinical difference, warrants further discussion. If the dominant drug is already paid at a premium rate then the introduction of an alternative is, at the outset of its introduction, not intended to reduce that premium. The newer drug may yield additional quality gains (marginal or otherwise) to stimulate rapid adoption or require a lower price point to generate the same effect. In either case, the asking price would be determined by the manufacturer, coverage price by the payer and adoption by the end user. In the situation of like for like substitutions, the limit price evaluation can guide all parties on efficient pricing. That is to say, a pharmaceutical that adds little clinical benefit through outcomes can still be evaluated as highly preferable by lowering its price. In this scenario, the limit price is helping the market to clear by making the effective price transparent.

In conclusion, we agree with the commenters that more needs to be done to turn concept into reality and that in doing so we will learn the degree to which the approach can either be adopted, adapted, or reformed into something with greater applicability.

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